Knowing that Coke controls 80 percent of the cola market and Pepsi controls 20 percent, we can conclude the cola market is:

Compared to a system of fixed exchange rates, currency unions are beneficial because they

A) allow exchange rates to float. B) allow every country to have an independent monetary policy. C) reduce the costs of trading goods and assets. D) restrict what countries can do with fiscal policy.

The new classical view of budget deficits assumes that

a. people view government bonds as an addition to their wealth. b. individuals do not anticipate the tax liability implied by deficit spending. c. increased government borrowing will raise the interest rate and retard private borrowing and capital formation. d. if future taxes (debt) are substituted for current taxes, people will save the reduction in current taxes in order to pay the higher future taxes.